Celebrate Freedom and save 20% OFF on CAclubindia Pro Subscription! Use code: FREEDOM20

Sale property

akhilesh tiwari (private worker) (240 Points)

10 September 2020

Sir, I purchased a land of rs 4200000 in 2018 and we are making it a plot for instalment selling so please tell me how the capital gains will be calculated.

Reply
Follow
Share

4 Replies

damodar sarda (CA Practice ) (184 Points)
Replied 10 September 2020

Sir..In my opinion...your sale seems to fall in the form of advemture in the nature of trade. Hence will be liable for tax under Business Income.
However u can claim capital gain indexing benefit by converting the capital asset in to stock in trade.In such case, part of the income be capital gain and part under business head.

Upgrade to CAclubindia Pro. Subscribe Now!

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 11 September 2020

Please advice, what is the nature of your business, are you into construction. on the open plot, will you be building a residential complex and sell it to prospective buyers.
please be specific while posting your query

akhilesh tiwari (private worker) (240 Points)
Replied 11 September 2020

Sir building is a residential and sell it to prospective buyers

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 11 September 2020

If you are in construction business, and are developing plots on it, then sale of plot will to prospective buyers will be considered as business income